Edinburg council weighs incentives to subdivision developer

EDINBURG — The city council might give nearly $207,000 in economic development incentives to a developer that wants to build an 80-home subdivision near the intersection of Canton and McColl roads.

Council members will discuss the potential Chapter 380 agreement with McAllen-based Domain Development Corp. during a special-called meeting Wednesday afternoon.

Domain intends to invest $31.5 million to construct James Court subdivision and wants the city to reimburse the company for off-site sewer and street improvements, according to information provided in the agenda packet.

Located near Canterbury Elementary School, the subdivision would include space for 80 single-family residential homes, 8,000 square feet of retail/restaurant space, and 12,000 square feet of office space.

The development would have a total economic output of about $55.2 million on Edinburg’s economy, according to a study by the Data and Information Systems Center at the University of Texas Rio Grande Valley.

Sai Mullapudi, a UTRGV level-four business economic research analyst, broke down the project’s impact in a Nov. 9, 2018, letter to Nelda Ramirez, the director of finance and contracts administrator for the Edinburg Economic Development Corporation.

“The proposed James Court Subdivision when established in Edinburg, will support the creation of 427 jobs, generate $13.5 million in labor income, add $27.5 million to the Texas Gross Domestic Product, and create $2.1 million in state and local taxes for a total economic output of $55.2 million on the Edinburg economy,” Mullapudi wrote.

But that’s assuming half of the homes will be purchased by people currently living outside of Edinburg with an average household salary of $90,000.

“Construction impacts are temporary during the construction phase” Mullapudi further noted.

Once built, the development will support the creation of 30 jobs.

If approved Wednesday, City Manager Juan Guerra will have the authority to negotiate and enter into an agreement between the city and the developer.

As part of that agreement, the city will be able to ask for evidence about job creation, including the issuance of a certified list of employees, employee quarterly reports and payroll registers. The city will also be able to access the property to inspect the improvements, but must provide the developer “reasonable prior notice.”

Once certain benchmarks are met, the city would reimburse the developer in two different phases. Fifty percent would be reimbursed to the developer once 25 percent, or 20 lots, have acquired building permits for construction of homes, and the other half “after confirming subdivision of commercial lots.”

The contract also includes some safeguards that would terminate the agreements, such as giving false statements, owing property taxes to the city, or if the business is dissolved.